Corporation Tax Act 2010 section 1075

Exempt distributions

Section 1075 establishes that certain distributions made as part of a demerger are treated as exempt and therefore fall outside the scope of corporation tax rules on company distributions.

• A distribution that qualifies as an exempt distribution is not treated as a company distribution for corporation tax purposes.
• Exempt distributions are defined by three specific categories set out in sections 1076, 1077 and 1078 of the Act.
• The effect is that exempt distributions do not trigger the tax consequences that would normally apply to company distributions.
• This treatment supports tax-neutral demergers by ensuring qualifying distributions are carved out from the general distribution rules.